Form 622. the undertaking, business, and goodwill thereof, with the full benefit New company to pay debts, &c., of old company. New company to pay costs of winding up of all contracts and agreements, and of all securities in respect of the said things in action, to which the old company is entitled, and all other the real and personal property of the old company whatsoever and wheresoever; subject nevertheless as to all the said premises to the several mortgages, charges, liens, and incumbrances affecting the same or any part thereof. 2. As a part of the consideration for the said sale the new company shall pay, satisfy, and discharge all the debts, liabilities, and obligations of the old company whatsoever, and shall adopt, perform, and fulfil all contracts and engagements now binding on it, and shall at all times keep the old company, its liquidators, and contributories, indemnified against such debts, liabilities, obligations, contracts, and engagements and against all actions, proceedings, costs, damages, claims, and demands in respect thereof. 3. As a further part of the consideration of the said sale, the new company shall pay and at all times hereafter keep the old company, its old company. liquidators, and contributories, indemnified against all the costs and expenses of and incident to the winding up of the old company, and of carrying the said sale into effect. Shares in new company to be allotted to members of old company. 4. As the residue of the consideration for the said sale every member of the old company shall, in respect of each share therein held by him, be entitled to require the new company to allot to him, or to his nominee or nominees, one 57. share in the new company with the sum of 51. credited as having been paid up thereon, and any member of the old company who shall take the benefits by this clause offered to him, shall accept the same in full satisfaction and discharge of all claims and demands in respect of his interest in the assets of the old company. Suppose the shares in the old company to be 107., fully paid-up, and that it is desired to return 57. per share to the members. In such case, if the new company is to have power to call up the amount again, the clause will provide, that every member, &c., shall be entitled, &c., " to require the new company to pay to him the sum of 51. in cash, and to allot to him or to his nominee or nominees one 107. share in the new company, with the sum of 51. credited as having been paid up thereon." If the new company is not to have power to call up the 57. again, the shares will be 51. each, and will be allotted as fully paid-up. Of course, instead of cash, debentures or other securities may be issued. Sometimes where the shares in the selling company are not all paid up, the latter part of Clause 4 above runs thus: "With the same amount credited as paid up thereon as stands credited in the books of the old company as having been paid up on the share in respect whereof the same is allotted." And sometimes the clause is expressed thus: "As the residue of the consideration for the said sale, the new company shall allot shares in the capital of the new company in such manner as the liquidators of the old company shall direct, to the intent that such shares shall be divided as nearly as may be among the members or contributories of the old company, according to their rights and interests in the assets of that company." Where the agreement provides for the allotment of the shares to the liquidators, and such shares are only to be in part credited as paid up, it may be well to insert a clause providing that "The liquidators of the old company shall not be bound to accept an allotment of any of the shares mentioned in clause hereof, which they shall not require for allotment to the members of the old company, in ac- Form 622 cordance with that clause," or to provide that the allotment shall be made “ upon the request" of the liquidator. Unless this is done, it may be contended that the liquidator is bound personally to take the shares, and this might involve him in liabilities. Dyett's case, 43 L. T. 85. payment of dissentients. 5. If the liquidators of the old company shall, in order to carry the Provision for said sale into effect, have occasion to purchase the interest of any member of the old company, then and in every or any such case the new company shall be relieved from the obligation imposed on it by Clause 4 hereof as regards such member, but shall pay to the liquidators for the purpose of effecting such purchase such sum as, by arbitration between the old company and such member, or by agreement made with the sanction of the new company between him and the liquidators of the old company, shall be determined to be the price payable in respect of such purchase. accepted. 6. The new company shall accept, without investigation, such title as Title the old company has to all the real and personal property and premises agreed to be hereby sold. 7. The old company and its liquidators shall, as soon as conveniently Delivery. may be (but without prejudice to Clause 8 hereof), execute and do, at the expense of the new company, all such assurances and things as shall be reasonably required by the new company for vesting in it the said. property agreed to be hereby sold, or any part thereof, and giving to it the full benefit of this agreement; and in the meantime (subject as aforesaid), the old company shall stand possessed of the property agreed to be hereby sold in trust for the new company, and it shall be lawful for that company in the name or names of the old company or its liquidators, but keeping them indemnified against all costs and damages which might arise thereby, to bring, take, and defend actions and proceedings, and to do all other things which shall be necessary or expedient for obtaining the full benefit of the said sale. of dissentients. 8. Provided always that the old company and its liquidators shall Lien in favour shall have a lien upon the whole of the property agreed to be hereby sold for all monies (if any) payable by the new company under Clause 5 hereof, and until the same shall have been paid the said liquidators shall be at liberty to retain the possession of all or any part of the said property, and thereout at their discretion to raise and pay such monies or any part thereof. As to this clause, see supra, p. 501. 9. Notwithstanding anything herein contained, if, in order to carry Power to the said sale into effect, it would be necessary for the liquidators to rescind. purchase the interests of members holding more than shares in the old company, the new company shall be at liberty by notice in writing, addressed to the liquidators of the old company and left at the registered office of that company, to rescind this agreement. This clause is not at all unusual. There might happen to be so many dissentient Form 622. members of the old company that the new company could not find the means to pay them off, and in such case it is convenient to give a power of rescission. Agreement not to operate as convey. ance. Form 623. Resolutions with a view to reconstruction. 10. These presents are intended to operate as an agreement only, and not as a conveyance, transfer, or assignment. This clause is frequently used in such agreements presumably in order to prevent any doubt whether the instrument is liable to ad valorem duty as a conveyance or transfer of any part of the property. See Tilsley, 188 et seq. An arbitration clause is sometimes inserted, although some doubt has been felt as to its validity. However, in Southall v. British Mutual Life Assurance Soc. 6 Ch. 614, James, L. J., was of opinion that an arbitration clause did not invalidate an agreement for a sale pursuant to Section 161 of the Act, and Mellish, L. J., concurred. 11. Until the dissolution of the old company, the new company shall at its own expense produce and show at such times, and to such persons, and in such places as the liquidator for the time being of the old company shall require, all the books, documents, and papers of the old company agreed to be hereby sold. A clause as above is sometimes inserted and appears desirable. Silber Co., 12 C. D. 717. IN WITNESS whereof the said companies have caused their respective common seals to be hereunto affixed, and the said liquidators have respectively set their hands hereto, the day and year first above written. The resolutions in the above case would be as follows: (1.) That the company be wound up voluntarily, and that A. B. and C. D. be, and they are hereby appointed liquidators for the purpose of such winding up. (2.) That the said liquidators be and they are hereby authorised to consent to the registration of a new company, to be named The A. Company, Limited, with a memorandum and articles of association which have already been prepared with the privity and approval of the directors of this company. (3.) That the draft agreement submitted to this meeting and expressed to be made between this company and its liquidators of the one part, and The Company, Limited, of the other part, be, and the same is hereby approved, and that the said liquidators be, and they are hereby authorised to enter into an agreement with such new company (when incorporated) in the terms of the said draft, and to carry the same into effect. In some cases it is thought expedient to frame the first resolution thus: "That it is desirable to reconstruct the company, and that, with a view thereto, the company be wound up, &c." [as above]. Where the new company is not to bear the same name as the old company, resolution (2) can be varied. Sometimes it is resolved "that the liquidators be authorised to consent to any variation in the terms of the agreement which they may think fit," and "occasionally the liquidators are authorised to make or enter into any such sale or arrangement as is contemplated by s. 161 of the Compa..ies In the matter of the Companies Act, 1862. And in the matter of The To Company Limited. and the liquidators of the above-named company. Form 623a. Notice of dissent pur suant to Take notice that I dissent from the special resolutions of the com- s. 161. pany passed and confirmed at general meetings thereof, held respectively on the day of — and day of. And I hereby require you either to abstain from carrying such resolution into effect, or to purchase the interest in the said company held by me, at a price to be determined in accordance with Section 162 of the above-mentioned Act. Dated, &c. A. B. of See Anglo-Italian Bank v. De Rosaz, L. R. 2 Q. B. 452; De Rosaz v. AngloItalian Bank, L. R. 4 Q. B. 462, and supra, pp. 499. AGREEMENT for RECONSTRUCTION SANCTIONED by the COURT in the Form 624. Winding-up of THE IMPERIAL MERCANTILE CREDIT ASSOCIATION. The following is a copy of an agreement which was sanctioned by the Court of Chancery. See In re Imperial Mercantile Credit Association, 12 Eq. 504. It was framed with the greatest care, and has since served as the basis of many other reconstruction agreements. ARTICLES OF AGREEMENT under seal made the 19th day Parties. of July, 1871, between Sir W. J., of —, W. M., of, F. F. of and A. C. S., of of the one part, and the Imperial Credit Company, Limited, of the other part: WHEREAS the Imperial Mercan- Recitals. tile Credit Association, Limited (hereinafter called the old company), has a nominal capital of 5,000,000l., divided into 100,000 shares of 501. each: AND WHEREAS a special resolution for the voluntary winding up of the old company was passed and confirmed at general meetings thereof, held respectively on the 28th day of May and the 14th day of June, 1866; AND, by an order of his Honour the then ViceChancellor Wood, made on the 26th day of June, 1866, it was ordered that the said voluntary winding up should be continued, but subject to the supervision of the High Court of Chancery: AND WHEREAS by calls made partly before and partly under the said winding up, the shares in the old company have been called up to the amount of 277. 10s. in all, leaving 221. 10s. per share still uncalled thereon: AND WHEREAS by means of such calls, of the assets realised, and of temporary s made Form 624. to the old company or its liquidators, the debts proved against or admitted by the old company, other than those due in respect of such loans, have all been paid, except so far as any of the creditors of the old company have omitted to receive any of the instalments which, however, are lying ready to be paid them: AND WHEREAS the old company is under a liability to provide certain sums of money for the completion of certain railway works in which it is interested: AND WHEREAS at the said meeting of the said shareholders of the old company, held on the 14th day of June, 1866, a committee was appointed for the purpose of assisting and advising the liquidators in the administration of the estate of the old company; and such committee is now composed of the parties hereto of the former part: AND WHEREAS by a circular addressed to the said shareholders, and dated the 6th day of July, 1870, the said committee proposed the formation of a new company, which should take over the assets of the old company remaining unrealised, according to a plan explained in the said circular: AND WHEREAS by a resolution passed unanimously at a meeting of the said shareholders, held on the 4th day of July, 1870, the said plan was approved of, subject to such modifications in the details as the said committee might sanction; AND a very large number of the said shareholders also individually signified their approval of the same plan, subject to such modifications as aforesaid: AND WHEREAS, after application had been made to the High Court of Chancery for its sanction of an agreement intended to carry the said plan into effect, certain modifications were made in that agreement, which, as so modified, was approved by a special resolution of the old company, passed and confirmed at general meetings thereof, held respectively on the 12th and 31st days of May, 1871: AND WHEREAS upon the further hearing of the said application on the 12th day of June, 1871, the Vice-Chancellor Bacon, to whose branch of the High Court of Chancery the winding up of the old company is attached, approved of the said agreement as so modified: AND WHEREAS the Imperial Credit Company, Limited (hereinafter called the new company), has since been incorporated under the Companies Acts, 1862 and 1867; and the parties hereto of the former part, acting so far as they lawfully may on behalf of the old company, have entered into this agreement, the terms of which correspond with those of the said agreement so approved as aforesaid, and intend to apply for the sanction of the High Court of Chancery to be formally given it Now THESE PRESENTS WITNESS that it is hereby mutually agreed as follows: The agree ment is conditional. Agreement to sell. 1. The parties hereto of the former part do not in any case personally undertake any liability hereunder, nor shall the new company be bound hereby further than as this agreement, either as it now stands or with any modifications, shall by the High Court of Chancery be sanctioned and ordered to be carried into effect by the liquidators of the old company. 2. Subject to the foregoing condition as to the binding force of this agreement, the old company shall sell to the new company which shall |